Can Buying Costco Stock on the Dip Help Make You a Millionaire?

Core Viewpoint - The current market uncertainty, primarily due to tariff announcements from the Trump administration, has negatively impacted investor sentiment, with the S&P 500 trading approximately 9% below its February peak [1] Company Performance - Costco has shown impressive performance with a total return of 224% over the past five years, despite its shares being 16% below their record high set in February [2] - For fiscal 2025 second quarter, Costco reported a same-store sales (comps) growth of 6.8%, continuing a streak of consistent growth even during challenging economic conditions [3][4] - The company's diluted earnings per share (EPS) have increased at a compound annual growth rate of 11.5% over the past decade, with expectations for the same growth rate between fiscal 2024 and fiscal 2027 [4] Competitive Position - Costco's scale and operational efficiency contribute significantly to its success, with net sales of $62.5 billion in the second quarter, making it the third largest retailer globally [6] - The company maintains a competitive edge by offering everyday low prices, supported by a membership base of 78.4 million households, which grew by 6.8% year-over-year and boasts a 93% renewal rate in the U.S. and Canada [7] Market Dynamics - Despite competition from Amazon and its Prime membership, Costco has consistently grown its membership, revenue, and EPS, indicating strong consumer preference for in-person shopping [8] - The current valuation of Costco shares is high, with a price-to-earnings ratio of 52.6, leading to skepticism about the potential for similar investment returns as seen in the past [9][10]